Serving the long tail white-paper (how to rationalize IT yet produce more apps)

Serving the Long-Tail of Demand for Enterprise Software

Fewer, better software platforms for less $$$s

WHITE PAPER

Originally published in September 2010

Updated in May 2014

Ian Tomlin and Nick Lawrie

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Introduction

This document describes how Chief Information Officers and IT procurement leaders can achieve greater economies and drive through more process efficiency savings by delivering fewer, better information systems.

It examines the reasons for a growing long-tail of demand for situational business applications and explains why off-the-shelf software applications may represent both high cost and high risk answer.

It then qualifies why platforms able to repeatedly produce and operate situational applications at very low cost may represent the best-fit solution to meet long-tail demands.

CONTENTS

A New Economic Imperative

The Bottom Line

Serving the Long-Tail

Codeless Situational Applications Tools

Known Roadblocks

Technology to Empower Process Improvement

Evidence of Results

Qualifying the ROI

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A New Economic Imperative For decades, well established large organizations with robust business models have enjoyed IT budgets of relative plenty. But the slow-down in economic growth of recent years has installed a new economic reality.

The role of IT in organizations has not changed fundamentally – even while operating in a depressed economic period organizations need information systems to fuel process improvements, creative innovation, growth and front-line customer services. What HAS changed fundamentally is the size of IT budgets, probably forever. The world of corporate IT is facing a permanent change in its funding.

To achieve significant cost reductions whilst avoiding direct impact on frontline services and growth, organizations are re-visiting how they run IT and procure services. Decision makers are pressured to inject innovation into procurement approaches and to take marginally more risk where the promise of step-change rewards exists.

Nowhere is the potential for rewards greater or more achievable than in the supply of business software applications that satisfy stakeholder demands to source innovation in information systems, improve the efficiency of processes and inject new ways of engaging with customers and finding new markets.

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The Bottom Line

The total cost of IT for organizations should not exceed 1% of income. For many organizations, a target outline cost for IT in the order of 0.5% of turnover is achievable.

Organizations that have already thoughtfully engineered their IT function, like easyJet in the United Kingdom, can today run their IT operations at a cost that represents less than 1% of total revenues. This compares to the majority of organizations whose IT costs will range from 1.5% to 6% of income. easyJet is profiting from moving its core platforms to cloud computing and adopting Software as a Service solutions for utility applications like email, calendaring and office software.

This paper argues that yet more rewards can be achieved through more thoughtful approaches to IT procurement without significantly increasing risk. For organizations that face more extreme changes to compliance and market conditions, more can be done to deliver adaptive, better-fit IT to proportionately more IT users.

A myopic focus on cost reduction can result in an inward looking culture that ignores the potential to power growth through technology innovation. The potential of IT to create competitive advantage, boost customer service performance and streamline business processes to create operational excellence has taken a knock over the last two decades – but the potential still exists for IT to do just that.

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Serving the Long-Tail

The majority of large enterprise have by now adopted core platforms for business computing to service the ‘majority need’ for software applications. But a faster pace of change in business markets, the need for greater compliance and control, greater access to data made possible by ‘big data’ technologies and the joint impacts of social networking, consumerism and mobile working have led to greater demands by individuals and communities of users for ‘enterprise-grade’ software applications to meet their ever changing information needs.

In most large enterprises, the majority need for applications is met by a small number (i.e. the top 20%) of enterprise applications. Sourcing and deploying these ‘big wheels’ of enterprise computing architecture - that underpin the core mission-critical processes of the enterprise - has been the focus of enterprise computing for decades. Economies from these deployments come from the adoption of best practice and the consolidation of business operations to shared service centres able to fulfil business needs across the enterprise.

The last decade however has seen an ever growing demand for additional applications to respond to the ever changing needs of individuals and communities. While the net number of users for these applications may be lower, the importance of the information, and the role of these individuals as innovators and change agents in the enterprise, has placed greater pressure on IT and procurement departments to source an ever increasing range of business applications.

This demand by smaller numbers of users for higher numbers of applications has become known as the ‘Long-Tail’. Situational applications platforms meet this need by providing a common technology platform able to repeatedly author applications and deliver them to individuals or communities of users in a fraction of the time and at a fraction of the cost of traditional tools. This is made possible by their adoption of codeless authoring and use of ready-to-use templates and design building blocks that negate use of traditional best-of-breed platform tools and coding skills. The first ever situational application platform was the spreadsheet. Times are changing. Information workers need to deal with much bigger data sets and IT leaders must ensure that data is organized, always-secure and any software application must adhere to necessary standards of governance and compliance. The new generation of situational applications platforms like Encanvas (www.encanvas.com) are engineered to meet ‘IT hygiene standards’ of security, performance and scalability, yet they provide unrivalled self-service tooling to enable web workers to exploit existing systems data.

The ‘long-tail’ of demand for situational apps

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Encanvas was created 2002 by the founders of NDMC Consulting. The founders believed that business users would seek to work in social groups that would span across and beyond enterprise boundaries and, having experienced this new form of business workplace, key knowledge workers and creative contributors to business processes would seek to be able to author applications for their communities in a form purposely sculptured to the needs of the community of use.

This idea of socially-centric, built-for-purpose and potentially thrown-away software was unknowingly endorsed by technology thought-leader Clay Shirky in his essay ‘Situated Software’ published in March 2004 when he wrote, “Part of the future I believe I'm seeing is a change in the software ecosystem which, for the moment, I'm calling situated software. This is software designed in and for a particular social situation or context. This way of making software is in contrast with what I'll call the Web School (the paradigm I learned to program in), where scalability, generality, and completeness were the key virtues.”

In August 2007, Luba Cherbakov and a team from IBM wrote the first of two articles on what they described as ‘Situational Applications’.

In their paper titled ‘SOA meets situational applications, Part 1: Changing computing in the enterprise’, Cherbakov and her colleagues defined the attributes of Situational Applications, stating, “The loosely accepted term situational applications describe applications built to address a particular situation, problem, or challenge. The development life cycle of these types of applications is quite different from the traditional IT-developed, SOA-based solution. SAs are usually built by casual programmers using short, iterative development life cycles that often are measured in days or weeks, not months or years. As the requirements of a small team using the application change, the SA often continues to evolve to accommodate these changes. Significant changes in requirements

may lead to an abandonment of the used application altogether; in some cases it's just easier to develop a new one than to update the one in use.

The emergence of BIG DATA technologies has led to the rediscovery of the important role of expert situational applications tooling as organizations acknowledge the need to equip analysts and middle-managers with self-service, community-centric applications to assimilate, analyse and act on the actionable insights they’re surfacing.

Nevertheless, situational applications remain a largely misunderstood concept in enterprise computing due to many misguided pre-conceived notions that are now proven to be fatally flawed. These include:

•Applications that can be designed cheaply enough to ‘throw-away’ can’t possibly be expected to meet enterprise data integration, security, performance and tuning expectations.

•It’s not possible to create the critical-mass of building blocks and tooling required to remove the majority of programming overheads.

•Organizations are better off buying best of breed solutions, to then mackle them together.

•There is no competitive advantage to be gained from IT as companies now use the same platforms.

•If players like Microsoft, Google, Oracle and IBM haven’t made it work then it isn’t possible!

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Codeless Situational Applications Tools

SITUATIONAL APPLICATIONS represent the MAJORITY of emerging demands for software ‘systems’ beyond the core platform components of Financial and Enterprise Resource Planning (ERP) systems.

Situational Applications Platforms are cloud-based tool-kits that support repeated production of situational applications. Their commercial licensing or rental models presume that organizations will produce a near-infinite number of business applications. They offer an alternative approach for the provision of new applications to serve the long-tail of demand.

Before engaging a procurement process or custom coding development, the majority of ‘systems’ requirements are considered for internal delivery by business analysts embedded into change management teams (and motivated through targeted remuneration packages to improve the process areas they serve).

Situational applications development is performed on software platforms that analysts can use themselves to create applications in consort with stakeholders to support improvements in business processes without having to code or acquire tools and skills that would necessitate an ‘IT project’.

This approach places focus and rewards on process improvement and business outcomes rather than the technology componentry.

Situational Applications offer a practical alternative to custom coding, software procurement or outsourcing.

Benefits of this method:

Project complexity and risk is removed by creating applications in workshops

No programming skills and competencies are needed.

No dependencies exist for middle-ware software or third party tools in areas such as business intelligence, geo-spatial intelligence etc.

New applications are created without additional software costs

No costs are associated with browser compatibility testing, applications re-working, de-bugging or performance tuning.

No version upgrades or maintenance costs apply.

Economies of self-authoring business applications without custom coding (Source: Encanvas Inc.)

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Known Roadblocks

A series of road-blocks have prohibited innovation in IT procurement approaches to serve the long-tail of demand for software applications. Thanks to developments in the science and application of computing, these roadblocks have now been overcome.

Norms of IT buying behaviour Problem: There is a widely held view in business IT procurement circles that ready-built software represents a lower risk than custom-built software. This is mainly because buyers presume projects will require custom programming. Furthermore, IT buyers are pressured to consider outsourcing as a means of offsetting cost without being able to monetize the ‘downside’ of outsourcing strategies, or consider alternative insourcing strategies. IT buyers must look beyond accepted sourcing approaches if they are to achieve step-change cost and efficiency benefits made possible by new innovations in computing. Overcoming limitations of Web browsers Problem: Until very recently it wasn’t possible to provide assurances to corporate IT buyers over the performance, security and usability of applications delivered via web browsers owing to the limitations of operating systems platforms and browsers. The presumption continues to pervade that applications installed on a client or server internally are somehow ‘better’. Recent events in the development of web-based computing such as increased competition in the web browser market resulting from Google’s entry, market acceptance of AJAX technology, the release of HTML 5, the launch by Microsoft of Active Server Pages (ASP) 3.5 etc.

have collectively made possible the design, deployment and operation of Rich Internet applications in a client server architecture that perform just as well as (if not better than) pre-installed desktop and server software.

Project cost and complexity resulting from custom programming Problem: It is presumed that custom applications can only be developed by custom programming. New innovative (so-called ‘codeless’) software like Encanvas Secure&Live facilitates the design, deployment and operation of sophisticated Rich Internet Business Applications without the need for custom programming. Applications are developed by business analysts working closely with stakeholders and users. Applications are designed in workshop environments without the need to programme.

Use of multiple development tools Problem: It is presumed that new applications developments will require multiple separate technology components to discharge the varied functions of a business application – such as database, workflow software, intranet and content management software, reporting and dashboarding (business intelligence) software, mobile computing software, geo-spatial information and mapping software etc. For each of these software tools, unique IT competencies are needed, leading to large project teams and complex projects. New codeless software development platforms like Encanvas adopt an approach similar to LEGO® whereby building blocks of technology are ready-made so that applications designers can create new applications with all of the necessary features supplied ‘out-of-the-box’ without custom programming.

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Dependence on middleware Problem: When data is held in different systems and in different formats, it has been traditionally very difficult to acquire and return data to and from new software applications. Another presumption therefore exists that it’s not possible to easily acquire and return data to different systems at the same time, or robustly govern the security and organization of data. The advent of enterprise mashup technology and services oriented computing has overcome these obstacles. It means that new applications can be rapidly created that re-use data that exists in internal systems or is accessible via the web without compromising security or systems resilience. Products like Encanvas include sophisticated data acquisition, data transformation, data aggregation, data query design and database creation features thereby removing any dependency for middleware tools to exist.

Software development project complexity Problem: Decades of failed IT projects have convinced IT buyers that custom software applications are high risk. IT projects often fail as the result of several associated factors that combine to create complexity:

1. Organizations have been traditionally required to use many tools to develop software applications.

2. Use of multiple tools demands multiple

competencies; therefore the number of people required for projects swell.

3. Communications between project

outcome specifiers and deliverers break down. Applications are programmed ‘offline’ in backrooms against a design specification that must be authored at a time when it’s difficult (if not impossible) to envision the end solution and whether it will deliver an ROI.

4. The need for programming (particularly

in the area of logic scripts and user interface appearance) leads to large volumes of custom code that is non re-usable yet must be tested for cross-browser compatibility, security, server performance and resilience. This results in a major cost overhead for testing and debugging on any custom project.

5. Owing to poor communications between project sponsors and deliverers, it’s common for large amounts of re-working and editing of applications to be required amounting to as much as 15% of project total costs.

In simple terms, demands for custom programming and large number of tools results in project process complexity and poor collaboration between project sponsors and delivers resulting in high project cost, long delivery timeframes, unpredictable ROIs and high risks. The solution to these challenges is to adopt agile design software that business analysts can use to deliver applications without needing to resort to programming and complex IT projects.

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Technology to Empower Process Improvement

The internal delivery of situational applications by business analysts (embedded into change teams) presumes the existence of development tools business analysts can master to build, deploy and support robust applications by themselves - without custom coding - in order to embed IT expertise into change teams.

To adopt SITUATIONAL APPLICATIONS DELIVERY three things need to happen:

1. A codeless platform for situational applications design and delivery should be selected and installed.

2. Analysts should be trained in situational applications project delivery. .

3. IT procurement ‘norms of behavior’ should consider suitability of situational applications before turning to off-the-shelf software solutions.

These three key steps are described in more detail here:

1. Installing tools

Provision of an integrated applications platform that supports design, deployment and delivery of situational application means that analysts are able perform both design and delivery roles. This bleed of the IT function into change teams dramatically reduces the number of people engaged in IT projects and the level of expertise required of candidates. It dramatically reduces dependencies on internal programming teams and outside consultants.

Organizations like Volkswagen Group have for several years adopted Process Improvement Managers as part of change teams. These individuals are expert IT professionals (traditionally business analysts or IT project programme managers) and possess both an understanding of business processes and technology. Motivated by remuneration plans associated with process improvement targets and achievements, the focus of process improvement managers is to instigate and deliver perpetual improvement in core business processes, rather than simply build applications.

2. Equipping the analysts

For situational applications delivery to be successful, analysts require a common toolset (computing platform) that can design, deploy and operate potentially hundreds of secure and live portal spaces containing hundreds of applications without creating a burden on IT resources or creating performance, security and systems resilience issues.

The economics of the platform must enable applications to be designed and then discarded, modified or sustained without high costs to encourage innovation and the creative use of IT.

It’s important that business software applications can be iteratively designed in real time by analysts working in workshop environments without requiring programming teams or advanced IT programming skills; or the need to work with multiple technology tools that would demand too high a level of skills and competencies for any single person to master application design.

It’s important that the selected software application platform delivers Rich Internet experiences and levels of collaboration now expected of modern applications – a benchmark standard that is guided by the quality of applications offered to consumers by both Apple and Google.

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3. IT procurement norms should adapt

Unless IT procurement practises adapt, possibilities for insourcing through situational applications delivery can never be achieved as successive applications requirements are packaged into boxes for procurement without consideration being given to alternative sourcing approaches.

Encanvas Secure&Live is an example of a purpose-built technology platform to support situational applications delivery by analysts.

Encanvas Secure&Live adopts technology

architecture similar in ethos to LEGO, employing ready-made building blocks of technology by a single person with a single skills-set to author applications that install new ways of capturing, analyzing, presenting and sharing information. No programming skills are required to use the software.

All of the components of Encanvas are built in the same way – including design elements for business intelligence, mapping, social networking and collaboration etc. – so one person can ably deliver cradle-to-grave software applications without exhaustive knowledge of traditional IT competencies.

Situational Applications - Achieving a step-change in applications delivery

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Evidence of Results

Moving to situational applications delivery for business applications is a proven formula for rapid ROI in the creation of cost-effective, low risk projects as evidenced by these examples kindly provided by Encanvas Inc.

Ernst & Young The senior partners of one of the largest and most successful professional services firms were finding it extremely difficult to evidence their supplier credentials for new projects owning to weaknesses in their IT systems. Whilst much was known about past projects, clients and staff expertise, none of this information was in a single place. As a consequence, much manual work was involved in bringing together evidentiary content for inclusion into bids. In the full knowledge that no off-the-shelf solution existed, and with many varied expectations being outlined by the many country leads, the project lead for the international Power and Energy Knowledge Center elected to use Encanvas to work iteratively with business analysts to develop a solution. Over a period of 6-weeks a series of forms and data structures were designed that aggregated data and presented a ‘single page view’ of past Ernst & Young projects. With the advantage of iterative development, the system was seen to offer a best-fit solution after 12 weeks of User Acceptance Testing and was later adopted as an enterprise system.

Transport for London In 2003, the world’s largest metropolitan transport authority, responsible for both the strategic planning and provision of transport services for London found itself challenged to meet new compliance requirements as the result of the 2004 Traffic Management Act. The lack of coordination of road works undertaken by street works undertakers including its own activities and those of the 33 London boroughs meant there was an unnecessary frequency of disruptive works across the region. Seldom did on organization take advantage of work being undertaken by another to minimize congestion. It was recognized that a cross-industry partnership working portal was needed that could capture the relevant details of proposed works, accurately plot them and then make the proposed works available for viewing to all interested parties in a secure environment to enable coordination and arbitration processes that would ensure the most efficient implementation of the proposed works. Having proven that, by using Encanvas, it was possible to edit maps (plot road works) and store spatial data in one integral record, the application was built and deployed as a secure extranet in 6 1/2 man-days during an elapse period of 12 weeks.

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Canon Europe Ltd New compliance procedures placed on its Japanese parent meant that the European marketing headquarters operation of Canon Business Solutions was given a 6-week deadline to formalize the way it managed license distribution of the utility software tools it provided with its hardware. An administrative system was needed to monitor the distribution of software utilities across Europe with 100% traceability and full statistical analysis capabilities. From concept to completion, the internal team used Encanvas to develop and deploy a solution in less than 2 weeks. Sponsor comments - ‘Against a very tight deadline, we’ve achieved the delivery of a sustainable compliance management solution that minimizes administrative overheads placed on the team.’

West Sussex County Council At the introduction of the Traffic Management Act in 2004, WSCC identified the current information management of the Council was unworkable if all aspects of the new legislation were to be met. Engineers were required to reference six different systems to build a picture of planning considerations – and even then

mistakes could be easily made. The project team identified the sources of data from across the department and mapped out requirements. Samples of each of the data sources were gathered and a ‘start-point’ proof of concept was developed. This was presented to a workshop of users and stakeholders who spent a day discussing the format and operation of the system. The systems design was completed during workshops and a fully functioning system was deployed in 2 days. Sponsor comments-‘It is via Encanvas that we were able to demonstrate regionally what true GIS coordination was about, before any of the later industry systems.’

West Midlands ‘Mattisse’ Project (Telent Ltd) The Transport Authority for the West Midlands (UK) operating a transport and travel incident management system found their existing IT solution consumed the annual budget on maintenance alone leaving no resources for improvement. This meant that new users and uses couldn’t be accommodated although a new legislative was leading to demand for richer, more accessible information. Using Encanvas, the system was redeveloped as a client - server solution able to support no-client browser use. The application included geo-mapping of data, data entry/update forms and reports. Encanvas was chosen as it presented the most economically advantageous option, providing the fastest application time to market and lowest operational overhead for customer. Other rewards included affordable economics, reduced project risk, sustainability and adaptability.

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Qualifying the ROI

To measure the ROI advantages of insourcing made possible by situational applications delivery you don’t need to expose your organization to high risk or costs.

Trial implementations from software platform suppliers like Encanvas mean that organizations can affordably trial situational applications delivery by simply equipping one or two business analysts with the skills and tools they need to develop applications on-demand. Vendors like US Tech Solutions, Wolfpack Risk, NDMC, Sovereignty Technology and Ambridge Consulting provide introductory programmes combining training, coaching and software provisioning to equip organizations with the know-how and tools to move to situational applications delivery as a sustainable model for supporting systems modernization and process improvement. The Encanvas ‘ROI Builder’ programme consists of the following: Introduction to Situational Applications Delivery 1-day Workshop Training for Business Analysts 3-day training (normally onsite) Coaching and Knowledge Transfer Including the provisioning of knowledge transfer for business analysts and IT departments 6-days of consulting time Platform Supply and Installation Supplied on 21-day trial

Copyright Encanvas Inc. 2010 - 2014. Encanvas is a registered trademark of Encanvas Limited. All other trade names and trademarks used in this document are recognized as belonging to their respective owners.